Wonga, the online payday lender, is in talks over a shirt sponsorship deal
with the Premier League football club Newcastle United.

The controversial company is in discussions to become Newcastle’s next shirt sponsor in a deal that is expected to last at least three years from the start of the 2013-14 season.

Wonga’s logo is already on the shirts of the Championship club Blackpool as part of a sponsorship agreement which lasts until the end of this season.

The payday lender would replace Virgin Money as Newcastle’s shirt sponsor, after the banking group’s deal was last week terminated a year early.

Wonga has come in for criticism for the high interest it charges on loans. The company, which offers short-term loans of as much as £1,000 to individuals, said last month that revenues had hit £185m in 2011, while the number of loans made by the group quadrupled to almost 2.5m.

The potential Newcastle sponsorship deal comes as new figures show that the Office of Fair Trading has stepped up its scrutiny of the payday lending industry.

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Business property searches by the OFT, which started a review into payday lenders in February, have surged, according to the law firm Pinsent Masons.

The OFT carried out 68 visits in the first five months of the year, compared with just one visit in the whole of 2011, the law firm said. The increase has been driven by visits to payday lenders.

Wonga was criticised by the OFT over its methods of debt collection earlier this year, although the group challenged the warning.

“The OFT is taking a very proactive approach towards payday lenders,” said Ian Roberts, a partner at Pinsent Masons. “Going to a business and searching through its files is one of the most intrusive forms of action the OFT is able to take.

“Many payday lenders are happy to cooperate with the OFT as they are running legitimate businesses that meet the OFT’s requirements.”

The OFT, which declined to comment on the numbers, is expected to update the market on its review into the industry by the end of the year. It is able to make visits under the Consumer Credit Act.